Prosper is an online site where people with money to lend are connected with consumer who want to borrow money. Prosper loans have become extremely popular in the current economy.
Banks have become tightfisted with their money in this economy. The old joke of banks lending only to people who have money has never been truer than it is today.
Consumers who want to consolidate debt on high interest credit cards or need money to start or improve their small business are increasingly turning to private lenders such as those to make loans at Prosper.
The downside of a Prosper loan is the interest rate. People with money to lend are willing to make loans because they earn money on interest from those loans.
This type of loan is like any other financial transaction where money changes hands from one person to another with the expectation of repayment.
Those who invest money by making personal loans are lured by estimate returns of 10.4% on their investment. Consumers seeking a loan are told they can find fixed rates as low as 7.5% APR on a Prosper loan. Clearly, those numbers have some wiggle room as they don’t match up.
Why Transfer?
The interest rate on a prosper loan might not have been your primary consideration when you requested the loan. If you needed money for your small business or desperately needed money to pay medical costs or consolidate debt, chances are you were happy just to be granted the money you needed.
Over time, the interest rate to repay the prosper loan may become higher than credit card APR. Transferring a prosper loan to a credit card makes sense if it will result in a lower interest rate. This will allow you pay off the loan more quickly or to have lower monthly payments.
Transfering The Loan
On the prosper website, log into your account and select “make a payment”. Then choose the option of a new payment type and choose “credit/debit” as the payment method.
Enter the full information requested which will include your name, address, expiration date of the credit card and the full account number of the card. You will also be asked to enter the personal three digit code on the back of the credit card.
Enter the full balance of the prosper loan as the amount to pay and click on the submit button. The transaction is not completed immediately as happens when you use your credit card to purchase an item. When you transfer your prosper loan to a credit card the transaction will take a day or two to be processed.
Summary
If you have a credit card with a better (lower) Annual Percentage Rate of interest and a spending limit that is more than the prosper loan, you can quickly and easily transfer the prosper loan.
The decision to make this change should be based on the interest rate of both the prosper loan and your credit card account. If you can save money when repaying the loan, transferring the balance is a good financial transaction.
